4) McCain is now saying some things that are truly frightening. For example, he has said that he will freeze all budgets so that they can be reviewed. At first blush that may sound reasonable, to prevent wild and reckless spending. However, many organizations need an increase in money every year just to stay even, so freezing their budgets will severely impact their ability to work.

Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation.

Yes, because that worked so well for the banking industry! Just ask anyone at Fannie Mae, Freddi Mac, or the Lehman Brothers.

Wow.

This part was out of context, as pointed out in the comments below (thanks, Ryan!). I got the original quotation from Paul Klugman of the Washington Post, who is usually good about such things, and missed it myself when reading McCain’s original article. My apologies. Still, the analogy is a funny one.

Insanity: doing the same thing over and over again and expecting different results.
Albert Einstein
If A equals success, then the formula is _ A = _ X + _ Y + _ Z. _ X is work. _ Y is play. _ Z is keep your mouth shut. — Albert Einstein

Meh, we’ve been under a continuing resolution for years. And we’ve made great strides! We’re close to being unable to do any science, but we have a great idea for using the building network for a huge WoW melee!

I could deal with #4 if there were a corresponding freeze in tax withholding. But whatcha wanna bet there won’t be?

As far as Fannie and Freddie are concerned, the best thing to do would be to bite the bullet, let them fail, and make the market learn from its own stupid mistakes. Bailing them out is like enabling an addict.

The best thing they could do to health care is open up medical savings accounts. Remove the restrictions for interest, keeping money in, etc. and let people use them for paying insurance premiums in addition to medical costs. That way, businesses could pay into these accounts instead of buying insurance and then people could economize or customize, and wouldn’t have to worry about switching jobs.

“Yes, because that worked so well for the banking industry! Just ask anyone at Fannie Mae, Freddi Mac, or the Lehman Brothers.”

Anyone who thinks that’s open competition is smoking something. You have a government corporation staffed with political idiots and backed up by taxpayers with no oversight. In other words, it’s exactly like the current healthcare sector (currently over half-socialized).

“Anyone who thinks that’s open competition is smoking something. You have a government corporation staffed with political idiots and backed up by taxpayers with no oversight. In other words, it’s exactly like the current healthcare sector (currently over half-socialized).”

Not to mention that FM&FM were created by the government to be a half-nationalized system so that you wouldn’t have the “problems” that the market causes. Then, when they fail, they blame market causes.

You know those Family Circus comics with the ghostly character Not Me who always breaks the lamp? Well, I think there’s one like that for government, only it’s called The Market.

Wow–Ms. Lafsky is even snarkier than the BA! Not much support for her “analysis” in the comments either.

Also, McCain was referring to allowing individuals to be able to purchase health insurance across state lines, in the same way that you can use your ATM card in different states. This kind of de-regulation had nothing to do with the current Wall Street troubles.

the only ones who get to economize and customize are people who will likely never need health insurance. the rest of the populate would BE economized and customized. and then either the state would get stuck with the “uninsurables” again, or we’d just let those people die. i’m thinking the 2nd sounds more capitalist. let’s go with that, shall we?

Also, Fannie Mae wasn’t created to be a business, it was created to be a safety-net. it was then semi-privatized, and Freddie Mac created to prevent screams of “Monopoly!!!”. health care is the same. it’s semi-privatized, where the private insurers get the cream of the crop, and the risky cases are left to the state. that’s the absolutely wrong way to do it. businesses should be all private (both risks and profits), systemic social services on the other should be completely non-profit. it’s this silly mish-mash that creates problems.

Actually, Fannie & Freddy are perfect examples of stifling competition via government inteference. They are government-backed institutions with political cronies (of both parties) getting huge bonuses for sinking the ship.

Their problem was allowing them profit, but nationalizing loss. There was no risk in taking on bad securities, and the mortgage industry was pressured by the feds to make more risky loans.

Knowing nothing about the context of the quote the implication I read from it is that manned space exploration is something that should be left to governments and exploitation of space something private enterprise can do.

“Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people….

Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.”

The U.S. isn’t exactly in a financial downturn (3.3% annualized growth last quarter, just about exactly the average since the Great Depression), but neither is the economy growing as fast as it was in the late 1990s. This isn’t to say the Clinton administration is solely to blame. It’s politically beneficial to support getting folks in new homes, even those can’t really afford the houses. The Bush administration didn’t do a whole lot to discourage banks from giving out bad loans – which they could have, not by regulation, but by reducing the number of loans purchased by Fannie/Freddie. By subsidizing risk, government agencies are partially responsible for the mess we’re in. Investment banks and individual home buyers are also to blame.

If investors and home buyers had to assume all the risk of purchasing new, expensive homes, then perhaps we wouldn’t be in this mess. Most importantly, de-regulation isn’t to blame for this crisis.

Hmm, I actually liked McCain’s quote in item number 5. Less regulation thereby letting health care compete in a free market. This is called capitalism and it is our system.

Hmm, capitalism would seem to be failing millions of people when it comes to healthcare. The American healthcare system is up to four times more expensive than systems with a variety of single-payer systems, and that massive premium has bought us nothing. From life expectancy to infant mortality, the USA is no better than most other countries and is often worse off.

Taiwan decided that to compete with the rest of the modern world they had to implement such a system, and they did. The Swiss were one of the hold-outs against such a system until they created one over massive protest from conservatives that it would be a disaster for the Swiss economy. Today? Conservatives are in full support of their healthcare system.

In America, hundreds of thousands of people declare bankruptcy each year at least in part because they cannot afford to pay their medical bills. That means that millions of people and their families — wives, husbands, children — are bearing the additional strain of wondering how they are going to pay the next medical bill over and above worries about getting the treatment they need. The collateral damage is immense.

There is no one perfect system, sure, and there is still a lot to complain about with the British healthcare system I grew up with (though most of the scare stories I read in comments about the NHS were either never true–like Rudy “9/11” Giuliani’s remarks about prostate cancer treatment–or haven’t been true for a long while–like millions waiting years for treatment.) But nobody *ever* has to worry about going bankrupt while paying for their life-saving treatment at a time when they may be in fear for their lives, unless they decide to go private themselves, which is always an option. That alone, is a powerful arguement for a better, more affordable system — one that capitalism alone is failing to deliver.

Out of context? Seems to me you’re all missing the bigger context: opening the health insurance market to providers from other states means exactly what Krugramn says, that is completely obliterating a state’s authority to impose obligations on insurance providers. That’s what they did for the credit card business. Delaware and South Dakota have eliminated any limitations on what the credit card companies can do; that means that your state legislature can’t provide you with any protection, since the companeis will incorporate and sue you in those states.
Same for health insurance, the companies will incorporate in the states that have no mandates, will be able to pick up the least risky and most profitable clients, and the companies left in your state will be left with the least profitable clients.
That is the context. There is no trick on Krugman’s part. That’s exactly the problem.

Hmm, capitalism would seem to be failing millions of people when it comes to healthcare. The American healthcare system is up to four times more expensive than systems with a variety of single-payer systems, and that massive premium has bought us nothing. From life expectancy to infant mortality, the USA is no better than most other countries and is often worse off.

But we do not have a capitalist healthcare system. Where do you get that idea? Each state is its own insurance market, which limits competition among insurance companies. Each state has its own mandatory minimum coverage levels, which is why NY and NJ have the most expensive care in the nation – they have huge levels of minimum coverage. The insurance companies love this, and contribute to politicians to keep it that way.

Lawyers bilk the system out of millions (e.g. John Edwards). They love this, and contribute to politicians to keep things this way. The cost is spread to the rest of us with insurance.

Illegal immigrants and other uninsured use emergency rooms for their primary care, which they can’t pay for. The cost is spread to the rest of us with insurance.

Medicare and Medicaid don’t cover the full cost of most of their procedures. But they are so huge, most providers have to deal. The extra cost is spread to the rest of us with insurance.

Health care is entirely too expensive, but we should try actually freeing the market before we go to a nationalized system.

JohnW, I assume from your post that you favour a fully capitalist health insurance system (correct me if I’m wrong). How would that work? It would seem to me that it would leave many people uninsured who are in a high-risk category, or have known medical conditions, because no insurance company would want to touch them. Without any state or federal regulation, these people are completely hung out to dry.

2) Incidentally, you can now vote on what grades the answers from both candidates should get.

Yeesh, Internet grading? That has to be as useless as Internet polling, which is well absolutely useless (what I like about PZ Myers, his crashing of such polls to show how utterly useless and pointless they are).

“Yes, because that worked so well for the banking industry! Just ask anyone at Fannie Mae, Freddi Mac, or the Lehman Brothers.”

Honestly Phil, will you cut this tired crap out? Is your only ability here to give Argument by Analogy? Government is just as inept as its private-market counterparts. Sometimes even more so. How big is that national debt again? And how’s social security faring? Christ, just look at the government’s completely inept response to our current situation. _Both_ sides are filled with self-serving incompetent boobs.

It’s trivial to point out cases where more government had (or is going to have) a catastrophic outcome. Or less government had the same. Mind actually posting a real argument for once?

RE: remarks about health care, current shortfalls such as entire groups that are excluded from medical insurance coverage, etc.

COMMENT: Yes that’s a problem….but changing to something else involves a different set of trade-offs that do not necessarily better in a “better” result (and what constitutes “better” is very subjective, based on one’s individual values). One familiar example of the result of government intervention is Canada’s system — which is so good that it has spawned a unique profession: Medical Brokers that help those in urgent need get the care “sooner” from other countries. An insidious outcome from the “compassionate” “free” “single-payer [government]” system is that those needing urgent (but not necessarily immediate) health care are left to wait long enough to, literally, die…unless they resort to Medical Brokers. For an example see: http://www.freemarketcure.com/brainsurgery.php

No government has proven to be qualified to meet a spectrum of its citizen’s basic needs EVER when evaluated over a sustained long-term perspective. Why anyone thinks a current politician’s promises will result in anything different, this time, is another example of ‘doing the same thing over & over & expecting a different result’ — insanity.

PHIL — the link to “Ken” (another Ken) to his suggestion to stick to what you know, astronomy, instead of political blogging leads to a JREF challenge to someone on a topic unrelated to the subject here (it seems) — perhaps that link needs some adjustment? Presumably it was to lead to some early input that essentially says this was your blog & you’d write about whatever you want, and negotiated similar flexible terms with Discover??

@Mark P says:Actually, Fannie & Freddy are perfect examples of stifling competition via government inteference. They are government-backed institutions with political cronies (of both parties) getting huge bonuses for sinking the ship.

Their problem was allowing them profit, but nationalizing loss. There was no risk in taking on bad securities, and the mortgage industry was pressured by the feds to make more risky loans.

Too much government spoiled the sauce.

Yeah, aren’t you glad we will be shelling out big dollars for their golden parachutes? The government should just let them fall and sell off any assets, there is no good reason to prop up bad businesses.

JohnW, I assume from your post that you favour a fully capitalist health insurance system (correct me if I’m wrong). How would that work? It would seem to me that it would leave many people uninsured who are in a high-risk category, or have known medical conditions, because no insurance company would want to touch them. Without any state or federal regulation, these people are completely hung out to dry.

Not fully capitalist, just much more free market than it currently is. My hope is that the increased competition, a cap on malpractice awards, and reducing illegal immigration would bring the cost down significantly, making it more affordable for your average Joe.

As for people with prior conditions, you are right. I’m not sure how to handle that sticky wicket!

Stephen: First, chill out. I do not take kindly to your tone here. Read my comments policy, linked in the blogroll on the right.

Second, your argument itself is wrong. Social Security is doing fine. It’ll be decades before we have any real problem with it, if at all, and all this nonsense about privatizing it is a solution inn search of a problem… and a bad solution at that.

Of course the gov’t screw things up, but it also gets things right. We have seen over and again that the market as it stands is not a free one. The “Invisible Hand” is being guided by a few interests, and is not free ot do whatever is best for the consumer. Adam Smith was naive that way. We need some regulation of corporations, else we get disasters like Enron. This isn’t argument by analogy, it’s argument by example. We have evidence that this is true.

Re: Free market health care. One of the feelings I get from people who dismiss a “free market” health care system is that they have never, ever even bothered to look up the ideas, or they see the article is on a site opposing their precious, precious ideological p*ssing ground, and don’t even consider the ideas. It’s like the anti-nuclear power folks who trot out arguments that are 30 to 50 years out of date.

You hear things like “well, I assume such a system would [INSERT WORST CASE SCENARIO HERE]”

Read up on stuff, folks. Don’t just assume ideas across your ideological boundaries are all nonsense.

I also recommend the classic book “The Road to Serfdom” by F. A. Hayek

Also, read some history. Humanity’s past is a sad mess of aristocracy and serfs, of zero social mobility, of religious hegemony, of bowing and scraping to bloodlines. It was the emergence of the proto-free market ideas during the early Modern era that began to change all that until now, when two university students can turn a research project into a multibillion dollar company (Google) that pays lots of taxes.

I also think some people either forget, or truly do not understand where taxes come from.

QD, that whole ideology thing is getting old. And apart from some trolls, nobody here questions the merits of relatively unimpeded trade, so you can stop that too. Instead, why don’t you neatly summarize the argument, rather than linking to large documents and books.

The last I heard, Social Security is not fine. Obama wants to raise payroll taxes to keep it solvent. People in congress have talked about raising the minimum age again. The only privatization I have heard of is giving people the option to have a portion of their entitlement invested in the market – if they want to. Maybe I missed something else.

On another topic, Phil makes a point of McCains camp not answering Wireds question about who their campaign advisors are. Am I susposed to think something underhanded is going on? After reading the Wired article and then looking at the older links on their page, I’d ignore Wired magazine, too, because of the untrue, smear stories on their site.

Blog posts like this one do seem to lack real critical thinking. Things are just accepted (like news stories from papers that have recently demonstrated their lack of reporting skills) and lampooning/innuendo is chosen over real analysis.

I’m too lazy to read up and formalize my own opinion. Can’t you tell me what to think? 😉

Actually, here’s my opinion: Be responsible. Health care is your own personal responsibility. If you can afford a cellphone, cable, internet and a car, you can afford health insurance. I’d say that 90% of the population will not need major healthcare until we are well into retirement, and by then we should have had plenty of time to prepare for the medical costs.

It is illogical to think that if we nationalize health care then we would be able to treat every person for every illness. It is not economically possible. Cancer, heart disease and strokes are still the leading causes of death in the US. Accidents are #5, after lower respiratory diseases, according to the National Center for Health Statistics. Treatments for the these are super expensive, but the fact is eventually everyone will suffer from some form of life-threatening or life-taking illness. It is not physically or financially possible to save everyone from every illness.

If there is a 7% chance I will someday get some form of cancer, then there is a 93% chance I won’t. Why should I expect you to pay for my major medical expenses, and why should I pay for yours? That is why I have insurance, and lead a (relatively) safe life.

Phil Plait: “Of course the gov’t screw things up, but it also gets things right. We have seen over and again that the market as it stands is not a free one. The “Invisible Hand” is being guided by a few interests, and is not free ot do whatever is best for the consumer. Adam Smith was naive that way. We need some regulation of corporations, else we get disasters like Enron. This isn’t argument by analogy, it’s argument by example. We have evidence that this is true.”

Those few interests are in government in many cases and you seem to think more of those few interests should be. How can you assume that politicians and unelected bureaucrats have the interest of the consumers in mind? There are already plenty of laws against things like cheating and stealing.

I wish more people would realize that corporatism is a government policy, and wouldn’t exist without government intervention. People need to read up about the corporatism that led to the Enron scandal and stop blaming the free market for something that was caused by government intervention.